How to get out of your head about investing
I’m not a financial advisor. I’m not a CPA nor do I work in the financial world. However, the pandemic for us artists, small business owners, and workers in the gig economy was sort of economic darwinism. This is not a how to invest or what to invest in, but rather a plea for my fellow workers to start saving because our careers are fragile. I just wanted to share a few concepts and quotes that I hope inspires you to start investing! I definitely think of these when I sometimes struggle myself.
One of my favorite Warren Buffett quotes is “If you don’t make money while you sleep, you’ll work until you die”. I believe he’s inferring two things. First the power of compounding and second inflation. For compounding, if you invest in something with a dividend and you reinvest it, it starts to compound. For example, let’s say you have a stock where the price is $100 and has a dividend of 1%. You have only 1 share. You get a dollar dividend. You reinvest the dollar, then next time you get the dividend, it’ll be based off the 1.01 share so the payout will be slightly larger.
The second example of inflation is when I played jazz gigs in the late 90s. The gigs would pay $50. Back then, that would get me a full tank of gas, and a few lunches. Now it barely would cover the gas. Everything keeps getting more expensive, so with our money we get less and less.
The best time to invest is yesterday! Because of the power of compounding, the longer you have money invested, the more it will grow. On average, the market goes up 10% a year but more realistically 6% or 7%. Jim Cramer said that if you invest 10,000 in an index fund in your teenage years, and don’t touch it, that 10k could possibly turn into 450k. And that’s without adding anything else! Pretty powerful stuff. One thing in my own experience is when you are just starting out, if the market goes up or down 1%, it doesn’t feel like you e gained or lost anything. But when you keep at it, it does, let’s say you have 100,000 in the market, if the market goes up or down 1% that’s 1,000 dollars!! That’s a lot of $50 gigs! Lol.
I highly recommend reading books like
I can Teach you to be rich , check out some financial podcasts like Investtalk. Hire a financial coach. I could recommend a few if you’re looking…
I wish you all the luck with you financial future!!! Also, feel free to comment or reach out to me if you have questions or want to discuss any of these concepts!
